Financial Crisis

mcclatchydc.com — One Wall Street bank, Lehman Brothers, filed for bankruptcy protection and another, Merrill Lynch sold itself to Bank of America for $50 billion. Earlier this year, the government helped enable the sale of Bear Stearns to J.P. Morgan Chase, and more recently took over Fannie Mae and Freddie Mac. Such troubles were supposed to have been prevented, or at least mitigated, by regulatory systems put in place after the banking system collapsed at the start of the Great Depression. But by the 1970s, a stumbling U.S. economy led to a change in America's political-economic values. Ronald Reagan led a movement that came to power in 1980 proclaiming faith in free markets and mistrust of government. That conservative philosophy has dominated America for the past 28 years.

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marketwatch.com — U.S. stock futures dropped as the crisis at American International Group deepened and Goldman Sachs reported a 70 percent drop in profit, with the market on alert for a possible interest-rate cut. The crisis at American International Group deepened as the insurer was hit with downgrades by four rating companies, giving the New York insurance giant precious little time to sell assets and receive loans to preserve its existence. Goldman Sachs said its fiscal third-quarter profit slipped 70 percent from a year ago as results at several units plummeted during ongoing market turmoil.

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